By Alton Cogert
Notice there is a question mark after that headline.
“How preposterous!” you might say, “State departments of insurance have no power to practice foreign diplomacy. Besides, what kind of sanctions could they possible impose on Russia.”
Well, with Russia and the West adding to their list of sanctions, don’t be surprised if the insurance regulators pile on.
Why? It has been done before. Not against investments in companies doing business with Russia, but with Iran.
Enjoy this link to an article published in 2010. The California Insurance Commissioner, preparing a run for governor, decided to practice foreign diplomacy. Most insurers abided with the ruling, while some of the largest insurers and trade organizations railed against the action. The Commissioner published a list of 296 insurers doing business in the Golden State who agreed to comply. For them, as for the larger non-compliant insurers, it was a small issue blown out of proportion. However, for the 296 it was easier to switch than fight.
Would Dave Jones, no relation to the late Monkees member, but current California Commissioner, take his own last train to Clarksville and follow in his predecessors’ footsteps?
It is doubtful. Please remember that the previous Commissioner Poizner was trying to differentiate himself in a gubernatorial election year, while Democrat Jones is not about to challenge his boss, Jerry Brown, running for his fourth and final cumulative term.
However, what of another commissioner? Although there only twelve elected commissioners, some may consider the office a jumping point for higher office. To the extent politics is involved, we may very well see a state commissioner or, perish the thought, the Federal Insurance Office, decide to waive the anti-Russian flag.
Is this just silly, peripheral nonsense?
Maybe not, as we’ve already seen the Russian billionaire owner of the Brooklyn Nets consider re-domiciling his NBA team to Moscow. Stranger things may be afoot.
In this world of mutually assured sanctions, don’t be surprised if a ban on a list of companies doing business with Russia is proposed for insurers, or even adopted by other institutional investors (especially politically sensitive pension plans).